A corn farmer is considered a free rider if he chooses not to join the national interest group his fellow farmers created, yet still reaps the benefits of the tax incentives the group lobbied for and won.
The free rider problem is an economic concept of a market failure that occurs when people or individuals are benefiting from resources, goods or services that they do not pay for. In our case, the corn farmer is benefiting from the tax incentives the group lobbied for, yet he or she made zero input or effort to contribute to the groups agenda in getting tax incentives. <span />
The estimation of the marginal propensity to consume should be 2 ÷3
The computation of the estimation of the marginal propensity to consume is shown below:
But before that the multiplier should be
= Total demand for goods & services ÷ government spending
= $42 billion ÷ $14 billion
= 3
Now as we know that
Multiplier = 1 ÷ (1 - MPC)
3 = 1 ÷ (1 - MPC)
1 - MPC = 1 ÷ 3
MPC = 1 - 1 ÷3
= 2 ÷ 3
Therefore we can conclude that The estimation of the marginal propensity to consume should be 2 ÷3
Learn more about the multiplier here: brainly.com/question/490794
Answer:
Decrease in income by $227,000
Explanation:
The computation of the amount of the change in the income in the case when the east territory is eliminated is shown below;
= -Sales + Direct cost + fixed cost - salary per year
= -$980,000 + $343,000 + ($450,000 - $40,000)
= -$980,000 + $343,000 + $410,000
= -$227,000
Hence, the amount of the change in the income in the case when the east territory is eliminated is -$227,000
Decrease in income by $227,000
Answer:
(A) $5,131.5
(B) $12,729.5
Explanation:
The interest earned on the value of interest earned before is the compounded interest. Compounding is the reinvestment of the amount earned before and take return over it too.
As per given data
Invested amount = $5,000
Interest rate = 3.9%
Interest is compounded monthly
Monthly rate = 3.9% / 12 = 0.325%
Formula for the accumulated amount of investment
A = P ( 1 + r )^n
Accumulated Money when $5,000 is
(A) Invested for 8 months
A = $5,000 ( 1 + 0.325% ) ^8
A = $5,131.5
(b) Invested for 24 years or 288 months (24 x 12)
A = $5,000 ( 1 + 0.325% ) ^288
A = $12,729.5
Answer:
Instructions are below.
Explanation:
Giving the following information:
Investment= $4,500
Interest rate= 11.45%
For both options, we will use the following formula:
FV= PV*(1+i)^n
a. Number of years= 43
FV= 4,500*(1.1145^43)
FV= $476,053.37
b. Number of years= 33
FV= 4,500*(1.1145^33)
FV= $161,010.77
